Buying a new car?
Buying a new car?
Dealerships Rip You Off With The "Four-Square," Here's How To Beat It - The Consumerist
I didn't face this when purchasing my Fit, but they did try the "we'll give you all these accersories, worth 3k for free!" bit if I bought the fit for like 19k or something ridiculous. I ended up getting my Fit for 16,600 (09 A/T) +Fees - C4C back in August.
Here's 5 tips to get you started, and then a very detailed breakdown of how the dealership manipulates buyers with the four-square.
Know what the MSRP of the car is, know what your trade is worth. (Here's a hint: take the NADA and subtract about $2K - used cars are appraised by books that aren't published to the public, so it's not blue book or NADA value. It's called "black book" value; "black books" are published weekly by companies such as Manhiem Auto Auctions (Manheim), and these show the going price at the auction, that week, for your car. Basically, wholesale cost.)
4) LET THEM KNOW THAT YOU KNOW WHAT THEY ARE DOING.
If you read this article, you are already ahead of 99.9% of the people walking in. They'll cut most of the bullshit with you if they know that you're not going to fall for it.
5) UNDERSTAND THAT YOU ARE NOT GOING TO PAY COST FOR THE CAR, AND THE AMOUNT YOU PAY OVER COST WILL BE MORE THAN YOU THINK.
6) HERE'S HOW THE FOUR-SQUARE WORKS:
The "worksheet" (or four-square, as it's called) is the first thing a person will see when they sit down to negotiate a car's price. This sheet is used both in used and new car sales. When the interested party sits down, they've already driven the car, and have talked to the salesman about what they're looking for. The salesman has had the trade evaluated, if there is one, and has gotten the customers something to drink to take the edge off.
Rest of article through link.
http://consumerist.com/2007/03/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it.html
I didn't face this when purchasing my Fit, but they did try the "we'll give you all these accersories, worth 3k for free!" bit if I bought the fit for like 19k or something ridiculous. I ended up getting my Fit for 16,600 (09 A/T) +Fees - C4C back in August.
Here's 5 tips to get you started, and then a very detailed breakdown of how the dealership manipulates buyers with the four-square.
“
1) GET YOUR FINANCING THROUGH THE CREDIT UNION BEFORE YOU EVEN STEP ON THE LOT. Once a car salesman knows you don't need financing, they're more willing to be forward with you and knows they don't have to work on the payments with you, because it won't help. We'll still try to beat whatever APR you're getting at the bank and offer you payment deals, but forget them. You've got it worked out, and only need to know the price - bringing us to the next point.
2) DON'T HAGGLE OVER ANYTHING BUT THE PRICE.
This seems obvious to most of the readers of The Consumerist, but most people miss this - especially if they're getting dealer financing.
”
3) DO YOUR HOMEWORK. 1) GET YOUR FINANCING THROUGH THE CREDIT UNION BEFORE YOU EVEN STEP ON THE LOT. Once a car salesman knows you don't need financing, they're more willing to be forward with you and knows they don't have to work on the payments with you, because it won't help. We'll still try to beat whatever APR you're getting at the bank and offer you payment deals, but forget them. You've got it worked out, and only need to know the price - bringing us to the next point.
2) DON'T HAGGLE OVER ANYTHING BUT THE PRICE.
This seems obvious to most of the readers of The Consumerist, but most people miss this - especially if they're getting dealer financing.
”
Know what the MSRP of the car is, know what your trade is worth. (Here's a hint: take the NADA and subtract about $2K - used cars are appraised by books that aren't published to the public, so it's not blue book or NADA value. It's called "black book" value; "black books" are published weekly by companies such as Manhiem Auto Auctions (Manheim), and these show the going price at the auction, that week, for your car. Basically, wholesale cost.)
4) LET THEM KNOW THAT YOU KNOW WHAT THEY ARE DOING.
If you read this article, you are already ahead of 99.9% of the people walking in. They'll cut most of the bullshit with you if they know that you're not going to fall for it.
5) UNDERSTAND THAT YOU ARE NOT GOING TO PAY COST FOR THE CAR, AND THE AMOUNT YOU PAY OVER COST WILL BE MORE THAN YOU THINK.
6) HERE'S HOW THE FOUR-SQUARE WORKS:
The "worksheet" (or four-square, as it's called) is the first thing a person will see when they sit down to negotiate a car's price. This sheet is used both in used and new car sales. When the interested party sits down, they've already driven the car, and have talked to the salesman about what they're looking for. The salesman has had the trade evaluated, if there is one, and has gotten the customers something to drink to take the edge off.
Rest of article through link.
http://consumerist.com/2007/03/dealerships-rip-you-off-with-the-four-square-heres-how-to-beat-it.html
Member
Joined: Aug 2009
Posts: 3,661
From: Georgia
That article is a bit dated. At least where financing is concerned.
Financing is part of the negotiation. If the dealer thinks you're getting financing with them they're more likely to agree on your offer. The first question out of the salesman's mouth will be, "Are you going to finance with us?"
Know what finance rates you can get before you walk into the dealer by applying through your bank, credit union, or insurance agent (they're now offering financing too, at least in the case of State Farm).
Tell the salesman you plan on financing with them. You can always tell them "no" after the sales contract is agreed on; financing isn't arranged until after that stage with the F&I guy. If this bothers you tell them, "If the rate you offer is competitive."
"Don't haggle over anything but the price" seems a bit unrealistic too. Everything is negotiable, especially dealer accessories. I guess you can tell them what you want and then haggle about price.
One of the biggest dealer devices is the "ADM" fee or administration fee. Sometimes known as Additional Dealer Markup. It's not mandatory. It's part of the price. Know what this is before you agree on a price. They will try to add this after. They will tell you a sob story about how they have to pay their clerks. All the market prices at edmunds and elsewhere include this. It's around $500 in GA and it's pure markup.
Haggling extends to the F&I guy too. Article makes no mention of the myriad warranty and maintenance packages he's going to try to sell you after you already agreed on the price. Don't buy any of this crap; you can always buy it later if you want. Don't fall for gloom and doom stories of people that didn't buy the extended warranties. They only serve to make the dealers more money. If you fall for the pitch HAGGLE. The warranties and maintenance prices are about twice the going price.
If you do finance through the dealer the freakin' finance charge is negotiable! It's not written in stone; they will try to sell you the highest rate because that's more money in their pockets (the finance arm pays them a commission, probably more than they make on the car sale).
The other aspect not mentioned is CHARM the salesman. Chat him up. Make him want to sell you the car at a price that is attractive to you. Especially with Hondas where they don't stay on the lot a long time. Actually forget that. Do your negotiating online. Use email. You'll have the home-court advantage that way.
Financing is part of the negotiation. If the dealer thinks you're getting financing with them they're more likely to agree on your offer. The first question out of the salesman's mouth will be, "Are you going to finance with us?"
Know what finance rates you can get before you walk into the dealer by applying through your bank, credit union, or insurance agent (they're now offering financing too, at least in the case of State Farm).
Tell the salesman you plan on financing with them. You can always tell them "no" after the sales contract is agreed on; financing isn't arranged until after that stage with the F&I guy. If this bothers you tell them, "If the rate you offer is competitive."
"Don't haggle over anything but the price" seems a bit unrealistic too. Everything is negotiable, especially dealer accessories. I guess you can tell them what you want and then haggle about price.
One of the biggest dealer devices is the "ADM" fee or administration fee. Sometimes known as Additional Dealer Markup. It's not mandatory. It's part of the price. Know what this is before you agree on a price. They will try to add this after. They will tell you a sob story about how they have to pay their clerks. All the market prices at edmunds and elsewhere include this. It's around $500 in GA and it's pure markup.
Haggling extends to the F&I guy too. Article makes no mention of the myriad warranty and maintenance packages he's going to try to sell you after you already agreed on the price. Don't buy any of this crap; you can always buy it later if you want. Don't fall for gloom and doom stories of people that didn't buy the extended warranties. They only serve to make the dealers more money. If you fall for the pitch HAGGLE. The warranties and maintenance prices are about twice the going price.
If you do finance through the dealer the freakin' finance charge is negotiable! It's not written in stone; they will try to sell you the highest rate because that's more money in their pockets (the finance arm pays them a commission, probably more than they make on the car sale).
The other aspect not mentioned is CHARM the salesman. Chat him up. Make him want to sell you the car at a price that is attractive to you. Especially with Hondas where they don't stay on the lot a long time. Actually forget that. Do your negotiating online. Use email. You'll have the home-court advantage that way.
Last edited by Steve244; Jan 17, 2010 at 04:52 PM.
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